August 4, 2015

Corn-Based Ethanol Production Promoted in Mato Grosso

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

With ever increasing corn production in the state of Mato Grosso, farmers are looking for ways to utilize more of the corn domestically within the state instead of paying high shipping costs to transport the corn to distant export facilities in southern Brazil. Turning the corn into ethanol seems to be an ideal way to add value to the locally produced corn crop.

The company USI (Intelligent Ethanol Producer S/A) has been working with Central Harvest States (CHS) and Novozymes to research and develop plans for new corn ethanol facilities in the state. USI is promoting ethanol facilities that will utilize 4,350 sacks of corn per day (9,570 bushels per day) or 1.5 million sacks per year (3,300,000 bushels per year)

According to the president of USI, Francisco Mallmann, a sack of corn (60 kilograms) would generate 23 liters of ethanol and 16 kilograms of DDG's (dry distillers grain) used in animal rations. A liter of ethantol is currently worth approximately R$ 1.50 per liter so a sack of corn would generates R$ 34.50 worth of ethanol. A kilogram of DDG is worth approximately R$ 0.45 resulting in R$ 7.20 worth of DDG produced from each sack of corn. Therefore the gross receipts from a sack of corn turned into ethanol would be R$ 41.70.

Corn producers in Mato Grosso could see increased price offers for their grain if more of the corn was consumed domestically. Utilizing more corn domestically could represent a tremendous saving s in transportation costs. Currently, the cost to move the corn to export facilities can run as high as $2.50 to $3.00 per bushel depending on location and time of the year. Selling the ethanol locally or to neighboring states would be relatively easy since most Brazilian cars are flex-fuel vehicles which can utilize 100% ethanol or ethanol blended into gasoline. The gasoline in Brazil is already a blend of 27% ethanol.

The company USI is a technology company located in Porto Alegre, Rio Grande do Sul that was founded in 2007 and is dedicated to research, production and marketing of ethanol facilities.